People’s Bank of China Issues Notice on Over-the-Counter Bond Investment
Reporter Chang Peiqi
On February 29, the People’s Bank of China issued a significant notice regarding matters concerning counter business in the inter-bank bond market. The notice aims to expand over-the-counter bond investment varieties and promote the high-quality development of the bond market.
According to the notice, the scope of counter investors has been clarified to include individual investors, enterprises, and financial institutions. This expansion of over-the-counter bond investment types will optimize institutional arrangements and facilitate bond investment by residents and other institutional investors. It is expected to increase residents’ property income and accelerate the development of the multi-level bond market.
The notice also includes provisions for foreign investors participating in the inter-bank bond market, allowing them to open bond accounts through counter business institutions and domestic custodian banks. Furthermore, bond lending and derivatives have been added to the trading portfolio of over-the-counter business operators and financial institutions.
Li Huan, director of the infrastructure business line of ChinaBond Ratings, commented on the impact of the notice, stating that the consolidation and expansion of the secondary market for government bonds will release liquidity for banks and provide more financial support for small, medium, and micro enterprises. This move is expected to ease the financial pressure on banks while promoting the development of the bond market.
The notice is also seen as a means to broaden residents’ investment channels and optimize the financing structure in China. By promoting the development of multi-level bond markets, the over-the-counter bond business is expected to enhance market activity and promote market stratification.
Overall, the issuance of the notice by the People’s Bank of China is anticipated to have a positive impact on the bond market and contribute to the ongoing development of the financial sector in China.